1) Definitely not years! A few months is usually sufficient for most people. From the advice I read here, work on practice questions on weeknights and do a full test on weekends, with plenty of time to review what you did right or wrong. Focus on weak areas for a good 20-30 minutes at a time (for each question type), or at least until you pick up the patterns in your errors. Take at least 4 practice tests.
2) My musts are Official Guide (11th edition), GMATPrep tests, and Princeton Review, Cracking the GMAT. I agree that it's great for strategies. The tests are also good. They come with answer explanations, which the GMATPrep (official tests) inexplicably (haha) do not.
3) I have never heard of a single school that takes your highest from each section. Would love to know which ones if they do.
4) I would imagine that many strong b-schools offer an MBA in statistics, although I would think if that's really your focus, an MS in statistics would do you better. Well, actually I guess it depends on whether you want to be in management or really work with the numbers. My brother-in-law has the MS and is a total number jockey, in a good way!